Views, ideas, inspiration, vision and practical tips for a better more prosperous Malawi

Imagine an African continent…” – Kofi Annan

Among the comments underneath the video on YouTube are:

1. “I want to be optimistic but judging from the butt licking seen at a recent Africa Business Forum (held in Dubai), I can assure you the African has a long way to go. It’s about change of mindset. Nobody is interested in HELPING you, they want your RESOURCES stupid! I almost plucked my lashes on hearing Prime Ministers, Ministers and top African leaders trashing each other and worshiping foreign. Over 50+ years after independence, you still cannot put your house in order! African Union my foot!”

2. “I wish this message is played over over in the bedrooms of these insensitive leaders in Africa.”

and

3. “Bless u Papa”

The issue Annan addresses is one that is critical to Africa’s economic development. Africa will not develop if African leaders are squandering African resources. If they are giving away Africa’s riches liberally. It appears like few African leaders ever question whether the contracts they sign with investors are truly in the country’s best interest. Do they ask third-parties for comment, or solicit views from across the country? Is there even a consultation?

Remember my observations here, about ENI which has been given a 70% interest in a Natural Gas finding off the coast of Mozambique? That’s precisely the unwise decisions which Annan refers to. Surely, there is little justification in giving away such a large interest, when Mozambique has more need for such resources which are essential to help it in eradicating poverty. Mozambique could have bought the required equipment and done the appraisal or exploration themselves. In the current global economic crisis, where jobs are scarce, I’m not convinced that anyone would have struggled to find the right talent, with the right experience to do the job to a satisfactory level of competence. In any case, no Mozambican (or African) company is likely to ever be awarded such a large interest in a natural resource in Italy (or indeed in Europe, America, or in Asia).

It’s simply not going to happen, and the Italians would never allow their government such obtuse liberties. Certainly not to the tune of $10 billion.

How then can African leaders justify giving away that much wealth, when their country folk are poor, and when the technology for mapping, finding and extracting Natural gas is somewhat elementary? And readily available. It’s not Space Science, or Nuclear Physics. But even if it were, in the current recession where governments are pushing for cuts throughout the western world, how many Nuclear Physicists or Space scientists, or Geophysical surveyors or Engineers out there are currently out of a job, and would relish such a challenge for less than $150,000 a piece, saving Mozambican government billions? Did the Mozambican government even consider doing the exploration or extraction itself using employed staff?

Lastly, I’ll leave you with a sobering question. Despite the fact that ENI have already sold part of that stake to the Chinese, do you know where the money they get from this deal will go? As in what does a company that makes billions in profits do with an additional $10 billion or more?

Will it be used to build schools or hospitals in Mozambique, some of which unfortunately look like this:

Or would the majority of such funds be used to multiply ENI’s wealth, possibly to issue dividends to ENI’s shareholders in Italy & Europe (or other industrialised and rich countries), where their schools and hospitals look like this:

Where will the majority of this money be invested? In Italy, in Europe? Or  in Africa?

If you showed the contents on this blogpost to any Mozambican, and asked them where in their view those resources are most required, what do you think they will  answer you?

I’d like to know how much (if any) of the actual monetary benefit ENI receives from this interest eventually remains in Mozambique ( for use in development, for Mozambican banks to make investment in foreign markets, etc). Surely if we are to take what Annan seems to clearly allude, Mozambique is the rightful owner of the natural resource. Why then should they receive peanuts from it? Shouldn’t they receive the lions share?

I’m not saying that ENI hasn’t contributed to social programs in Africa, or in other parts of the world, where they have operations,no that’s not what I’m saying. To the contrary ENI has supported social programs, most recently in Libya.

My point is, if European and American companies display wildly unrestrained greed in the form of behavior that suggests that they do infact own African resources, and African politicians are unable, unwilling or pressured from objecting to grossly unfair deals that are ‘discriminatory’ in every meaning of the word, and clearly unfair; and if civil society is unable to force African governments to renegotiate these unfair contracts (ideally before they are signed), how does anyone expect the continent of Africa to ever achieve economic development??When the resources that matter, and could make a huge difference to millions of lives, are given away so easily, moving only from South to North, or only from South to East, or from South to West??

Similar:

1. Who Owns the Land? Cameroon’s Large-Scale Land-Grabs

2. ‘The Resource Curse’: Why Africa’s Oil Riches Don’t Trickle Down to Africans

3. Africa Debate: Will Africa ever benefit from its natural resources?

4. Scramble for Africa

5.  Resource curse not the only reason for Africa’s poverty

6. Gazprom Said to Seek Stake in Eni’s Gas Assets in Mozambique

About Sang N.

Writer, Entrepreneur & Activist. Interests: History, Entrepreneurship, Business, Motors, Architecture, Aviation, Travel, Food and Art.

9 comments on “Imagine an African continent…” – Kofi Annan

  1. mtama
    May 6, 2013

    This must change. It’s so outrageous to say the least!

    Like

  2. sangwani
    May 6, 2013

    Well, unfortunately its common across Africa. And both western businesses and African leaders appear to think it is normal for things to run that way. In other words that they can go into Africa and get whatever they want, but Africans can’t set up shop in western countries and partake in western economies to the same level as they partake in African economies. It’s as if they are doing Africa a favour by extracting its resources…when they aren’t…In my view, they are plundering, and it’s either leaders in Africa are mentally challenged, powerless (in which case there’s pressure being applied somewhere) or plain dumb to acknowledge this anomaly. Or there is corruption behind these deals. As harsh as that sounds, I’m failing to see how it could be any other way because as was outlined here: https://malawiace.com/2013/03/26/stocktaking-24-pressing-problems-impeding-africas-economic-development/ Africa has more problems than European or North American countries, those are African resources, Africa needs those resources a lot more to transform its fortunes…. and must be allowed to own them. Another example here: http://www.2b1stconsulting.com/anardarko-and-eni-to-team-up-in-mozambique-lng/ where they say the capital expenditure required is estimated to be $15 billion. Is this really true? Or is it more of a grossly inflated estimation by a businessman who is trying to conceal his guaranteed profits? [as was the case here http://www.livemint.com/Industry/9lybdZXjNNZrvvKxvewjZO/Some-power-project-developers-dressed-up-accounts-experts.html It’s probably happening all the time, but because there is no independent auditing of such deals, few acts of misconduct are ever uncovered]

    So, if openness was to be achieved, then let’s see the receipts, and lets get in independent financial auditors and other specialists unconnected to the foreign company, to look at their books and those of their suppliers, to calculate and verify those capital costs. Let them evaluate the going rate of such equipment on the open market, and see whether it has truly been acquired for such amounts as they allege.
    It would be naive for anyone to believe half the propaganda that huge corporations put out, without independent verification. Unless such claims are audited independently, Africa’s resources WILL continue to be plundered by greedy sorts. I wish I had sympathy for this kind of behaviour, but I don’t, because I realise their long-term and far-reaching devastating implications.

    Like

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